Nokia Oyj (Nokia Corporation) v Ipcom GmbH & Co Kg & Anor

Where an interested third party intervenes to protect the confidentiality of documents disclosed in litigation, the court may apply the analogy of third-party disclosure costs. The usual starting point is that the applicant should pay the intervening party’s costs, particularly where the intervention was reasonable and necessary to protect privacy or confidentiality.

Confidentiality undertakings must be sufficient to prevent use of information outside the proceedings, including use to influence commercial negotiations. However, the court should not impose a broad prohibition on a professional adviser’s future involvement in negotiations where the existing undertaking adequately addresses the risk. Interested third parties may properly receive the benefit of undertakings directly.

The judgment concerned applications arising from patent litigation between Nokia, IPCom and HTC. Ericsson intervened to protect the confidentiality of a licence agreement disclosed in the proceedings. The court had to determine responsibility for Ericsson’s costs, the proper scope of additional confidentiality undertakings sought against IPCom’s advisers, and whether those undertakings should directly benefit intervening interested parties.

1. Costs of intervention. The order was not technically an order for third-party disclosure, but the analogy was close. The approach in SES Contracting v UK Coal Plc [2007] EWCA Civ 791 supported treating the applicant as ordinarily responsible for the costs of a reasonable intervention undertaken to protect confidentiality. IPCom was therefore ordered to pay Ericsson’s costs of intervention.

2. Scope of the undertaking. The existing undertaking prohibited use of confidential documents or information except for the purposes of the actions. Awareness of the information could not properly be used to influence the adviser’s position in negotiations. That undertaking was therefore effective without the additional proposed three-year prohibition on involvement in negotiations concerning licences or settlements.

3. The proposed additional restriction was unnecessary and excessive. The court could not determine in advance that the external lawyer could never participate in negotiations, or that participation in every category of negotiation would necessarily breach the undertaking. He had to decide, having regard to the undertaking and his professional obligations, whether particular activities could be undertaken consistently with it.

4. Benefit of undertakings. Since intervening parties formed part of the class having an interest in the protected information, it was logical and appropriate for the undertakings to be expressed directly in their favour. Other interested parties who wished to become direct counterparties should in principle be entitled to do so.